NEW YORK, NY -- (Marketwire) -- 07/10/12 -- The trucking industry represents a very important component of the US economy. According to the US Bureau of Economic Analysis, the trucking industry adds about 5 percent to the Gross Domestic product each year. The recent Cass Freight Index summarized the trucking industry in 2012 in one sentence: "Overall, still positive growth, but many ups and downs." Five Star Equities examines the outlook for companies in the Trucking Industry and provides equity research on YRC Worldwide, Inc. (NASDAQ: YRCW) and Arkansas Best Corp. (NASDAQ: ABFS).
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The number of freight shipments in the U.S. has increased at a relatively steady pace this year but are still well below last year's September high according to Cass Information Systems. Data from Cass showed that freight shipment volume has been trending upward and is 2.2 percent higher between January and May and the year ago period.
"The slowdown in manufacturing and backlog will translate to lower volumes to be shipped in the near future. Truck sales have dropped off dramatically and some companies have even laid off workers," noted the May 2012 report from Cass. "The housing market is very volatile, with strong numbers one month and weak the next."
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The American Trucking Association recently reported that the seasonally adjusted Truck Tonnage Index in May dropped 0.7 percent, following a 1.1 percent drop in April. But when compared with May 2011 the index showed a 4.1 percent increase, which was the largest year-over-year jump since February.
"Two straight months of contractions is disappointing," ATA Chief Economist Bob Costello said in a statement. "The drops in tonnage are reflective of the broader economy, which has slowed."
"The good news is that the decrease in fuel prices will help support retail sales going forward, which is a big part of truck tonnage," Costello said.
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